Nephros, Inc., a water technology company providing filtration solutions to medical and commercial markets, reported financial results for the fourth quarter and fiscal year ended December 31, 2025, marking its second consecutive year of positive net income. The company achieved full-year net revenue of $18.8 million, representing a 33% increase compared to $14.2 million in 2024, while fourth-quarter revenue reached $4.7 million, up 22% year-over-year.
This financial performance matters because it demonstrates the growing demand for water safety solutions across healthcare and commercial sectors, particularly as organizations face increasing regulatory requirements and public health concerns about waterborne pathogens. The company's transition to sustained profitability indicates that its business model is gaining traction in a market where water quality management has become essential for facility operations and patient safety.
Robert Banks, President and Chief Executive Officer, described 2025 as transformational for Nephros, attributing the company's success to execution of a strategy built around three growth pillars: Products, Service, and Education. "Our differentiated product portfolio remains at the center of our success," Banks stated, noting continued expansion of reorder rates, deployment of additional sales associates, and growth beyond traditional healthcare applications. The company also extended its long-term supply agreement with key partner Medica, ensuring continuity of supply.
The implications of this growth extend beyond financial metrics, reflecting broader industry trends toward comprehensive water management solutions. Nephros advanced its service offering through expanded installation and replacement capabilities led by Alfred Vargas, Director of Service, which has reduced barriers to adoption and strengthened customer relationships. Additionally, the company launched the Nephros Water Institute, led by Brianne McGuire, Director of Business Development, establishing Nephros as an authority in waterborne pathogen mitigation and facility water safety. This educational initiative supports long-term demand for filtration, service, and compliance-driven solutions.
Financial details reveal that gross margin remained at 62% for both 2025 and 2024, though fourth-quarter 2025 gross margin was 58% compared to 64% in the same period of 2024. The company noted that margins eroded somewhat during the second half of fiscal 2025 primarily due to tariff impacts. Since April 2025, Nephros has been subject to a 15% tariff on goods imported from Italy, which was reduced to 10% as of February 22, 2026. While this reduction provides some near-term relief, U.S. tariff policy remains unpredictable, creating uncertainty around potential future margin impacts.
Net income for the year ended December 31, 2025 was $1.2 million, compared with $74,000 in 2024, while fourth-quarter net income was $62,000 compared to $349,000 during the same period in 2024. Adjusted EBITDA for the year reached $1.6 million compared with $548,000 in 2024. As of December 31, 2025, Nephros had cash and cash equivalents of approximately $5.4 million, compared to $3.8 million as of December 31, 2024, and remains debt free.
The company's performance has broader implications for the water technology sector, indicating that integrated approaches combining products, services, and education can create sustainable business models in specialized markets. For more information about Nephros, please visit https://nephros.com. The latest news and updates relating to Nephros are available in the company's newsroom at https://tinyurl.com/nephnewsroom.
